System and method for managing trading orders with decaying reserves

Inactive Publication Date: 2009-10-22
BGC PARTNERS LP
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  • Summary
  • Abstract
  • Description
  • Claims
  • Application Information

AI Technical Summary

Benefits of technology

[0004]In accordance with the present invention, the disadvantages and problems associat

Problems solved by technology

In particular, by causing the reserved quantity to decay, the trading system may reduce the trader's ri

Method used

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  • System and method for managing trading orders with decaying reserves
  • System and method for managing trading orders with decaying reserves
  • System and method for managing trading orders with decaying reserves

Examples

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Embodiment Construction

[0015]FIG. 1 illustrates one embodiment of a trading system 10. Generally, trading system 10 comprises a trading platform 50 communicatively coupled to clients 20, networks 30, and market centers 40. Trading platform 50 may receive and process trading orders 12 from traders 70. In some embodiments, trading platform 50 may cause a portion of trading order 12 to decay over time. Trading platform 50 may thereby reduce certain risks associated with market volatility. In particular, by causing a portion of trading order 12 to decay, trading platform 50 may reduce the risks of having exposure to a stale trading order 12 with a price that has become unfavorable.

[0016]A given trading order 12 may comprise two parts—a “displayed quantity” and a “reserved quantity.” In placing trading order 12, trader 70 may indicate that only a portion of the total quantity of trading order 12 should be displayed to other traders 70. This portion of trading order 12 to be displayed to other traders 70 is ref...

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PUM

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Abstract

A system comprises a memory operable to store a trading order for a particular quantity of a trading product, wherein a first portion of the particular quantity is a displayed quantity and a second portion of the particular quantity is a reserved quantity. The system further comprises a processor communicatively coupled to the memory and operable to disclose the displayed quantity to one or more market centers. The processor is further operable to identify a decay rate associated with the trading order. The processor is further operable to cause the reserved quantity to decay based at least in part on the identified decay rate.

Description

TECHNICAL FIELD OF THE INVENTION[0001]The present invention relates generally to electronic trading and more specifically to a system and method for managing trading orders with decaying reserves.BACKGROUND OF THE INVENTION[0002]In recent years, electronic trading systems have gained wide spread acceptance for trading of a wide variety of items, such as goods, services, financial instruments, and commodities. For example, electronic trading systems have been created which facilitate the trading of financial instruments and commodities such as stocks, bonds, currency, futures contracts, oil, and gold.[0003]Many of these electronic trading systems use a bid / offer process in which bids and offers are submitted to the systems by a passive side and then those bids and offers are hit or lifted (or taken) by an aggressive side. For example, a passive trading counterparty may submit a “bid” to buy a particular trading product. In response to such a bid, an aggressive side counterparty may s...

Claims

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Application Information

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IPC IPC(8): G06Q40/00
CPCG06Q40/00G06Q40/06G06Q40/04
Inventor NOVIELLO, JOSEPH C.
Owner BGC PARTNERS LP
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